A Germany-based soccer kit salesman has testified about his complex business partnership with Canover Watson in the Cayman football executive’s ongoing fraud trial.
During six days on the witness stand over the past week, Shakeel Khawaja – a representative for Pakistani equipment supplier Forward Sports – told how he met Watson and his co-accused Bruce Blake at the London Olympics in 2012 and they agreed to a partnership.
Over the next year, Watson helped broker deals for Forward Sports to supply equipment, including footballs, shirts and socks, to national youth squads across the Caribbean.
Khawaja testified that Forward Sports had supplied equipment, totalling $625,000 in value, to regional soccer programmes on the basis of agreements he and Watson had arranged.
But he claimed to have no knowledge of a further $1.54 million in invoices, which prosecutors allege were cooked up by Watson to scam cash from the sport’s regional governing body CONCACAF.
Shown the three separate invoices for $750,000, $148,000 and $642,000 that form the basis of the charges, Khawaja said he had never seen them.
He also claimed to be unaware that Watson had set up and wholly owned another company, under the Forward Sports brand name.
At times he appeared confused about the businesses he was said to have owned with Watson and about the details of their partnership and the corporate structure of the business.
The charges
The prosecution alleges that Watson set up a similarly named company, Forward Sports International Management, in Panama, and issued three fake invoices amounting to US$1.54 million to CONCACAF for sports equipment that was never delivered.
Blake, his fellow former football executive at the Cayman Islands Football Association and CONCACAF, is charged with money laundering and false accounting for helping Watson move the stolen money.
Both have pleaded not guilty. The trial is expected to last 12 weeks.
Khawaja gave his principal evidence on Thursday and Friday last week, indicating he was totally unaware that Watson had set up another company using the same Forward Sports name.
He said he knew nothing about the invoices for equipment filed to CONCACAF and insisted they were not negotiated through him and that the goods had never been produced or supplied by Forward Sports in Pakistan.
Khawaja testified that the business was not very successful and costs had exceeded turnover.
A general ledger for Forward Sports in Panama, later renamed GOL Sports, given by Watson to Khawaja, and presented in court, did not show $1.54 million in sales to CONCACAF.
It only contained $482,000 in CONCACAF sales and $584,348 in total revenue.
After the deduction of money owed to Khawaja as a shareholder, the cost of sales and expenses, the company’s balance sheet showed a net deficit of -$287,340 for the period from July 2013 to October 2014.
Cross-examination
Under cross-examination, Watson’s defence team suggested Khawaja had not passed on payments sent by Watson for orders to Forward Sports in Pakistan and that this was the reason the sports equipment had never been delivered.
The jury was shown documents related to three money transfers to Khawaja’s business bank account in Germany for a total of $182,000.
The defence read into evidence a section of a transcript of Khawaja’s 2017 telephone call with Cayman’s Anti-Corruption Commission.
Investigators asked him if he ever received any commission or profits in his German account from the Panamanian bank account of Forward Sports. Khawaja said he did not receive commissions, but Watson had sent payments for two bills from Forward Sports in Pakistan to Germany so they could be forwarded, because he had problems paying them from Panama.
Asked whether he had passed on those funds to Pakistan, Khawaja said, “Yes, part of it,” and the other part he had kept because it was partially his commission, as well as funds he needed because he’d had big financial problems since 2015.
“But that was settled with Forwards Sports Pakistan, that I will pay them this money [later],” he said.
Defence QC Dapinder Singh seized on this statement, saying that Khawaja had kept the money, adding, “So that was the reason why goods were destroyed and not delivered to CONCACAF?”
Khawaja denied this with a simple: “No,” stating that every new order began with a new limit.
“It was agreed that I could use some money,” he said. “I was having my commission and something more, and Forward Sports was OK with it.”
It had nothing to with the destruction of goods, he added.
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